In the last fiscal year, mortgage lenders funded 114,692 reverse mortgages under the FHA’s HECM program. Five years ago just 43,000 of reverse mortgage loans were written.
Until a year ago, the reverse mortgage niche looked like a safe bet for mortgage bankers seeking a haven from the carnage in the industry.
After all, what could be [...]
The Home Equity Conversion Mortgage (HECM) is FHA’s reverse mortgage program which enables you to withdraw some of the equity in your home. You choose how you want to withdraw your funds, whether in a fixed monthly amount or a line of credit or a combination of both.
Frequently Asked Questions About Reverse Mortgages
What is a reverse mortgage?
A reverse mortgage is a loan that enables senior homeowners, age 62 and older, to convert part of their home equity into tax-free* income—without having to sell their home, give up title to it, or make monthly mortgage payments. The loan becomes due when the last [...]
How You Can Use the Money From a Reverse Mortgage
Eliminate existing mortgage loan payments
Payoff credit card debt
Supplement retirement income
Help pay for medical and prescription expenses
Pay for in-home care, long term care insurance, Medicare supplement
Use funds for home repairs or modifications
Use for wealth redistribution, estate planning or make a living charitable donation
Lifestyle enhancement
Travel
What You Need to Know About Reverse Mortgages
The Basics of a Reverse Mortgage
Reverse mortgage loans enable seniors to convert their home’s equity into tax-free cash, all while retaining the occupancy and ownership of their home. Unlike a traditional mortgage, there are no monthly payments to be made and repayment of the loan is deferred until [...]
You can sell the home, and the buyer’s money will pay off the reverse mortgage lender. If you do decide to pre-pay the reverse mortgage early, it may be possible to do so with no prepayment penalties.
If you die, then your reverse mortgage loan becomes due for payment. Your heirs need to pay off [...]
With Reverse Mortgages the money could be used for any purpose, such as:
Eliminate existing mortgage loan payments
Payoff credit card debt
Supplement retirement income
Help pay for medical and prescription expenses
Pay for in-home care, long term care insurance, Medicare supplement
Use funds for home repairs or modifications
Use for wealth redistribution, estate planning or make a living charitable donation
Lifestyle enhancement
Travel